4.2.3. Collection phase

The Tax Agency carried out a wide range of activities cast leading to the collection of the tax debts and penalties deriving from the application of the state's tax and customs system, in addition to those deriving from the other public resources whose management it assumes pursuant to an Act or Agreement.

In these activities, in both the voluntary and enforcement periods, it is necessary to use all the mechanisms provided by the legal system for enforced collection.

In 2019, the Tax Agency has continued to focus on intensifying the most qualified actions to combat fraud in the tax collection phase.

Evolution of outstanding debt

The collection management of tax debts consists in the exercise of administrative functions leading to collection. This includes a series of activities such as wealth investigation, the adoption of precautionary measures, the execution of liability assignment agreements and all those provided for in the General Tax Collection Regulations, subject to the periods established in the tax legislation.

Until the tax debts are extinguished, by payment, compensation or the other legally provided means, they are considered “outstanding.” However, within the outstanding amounts it is necessary to distinguish between those in which there are cases of suspension, deferral or insolvency proceedings, which are not due and payable while they remain in that situation, from all the other outstanding amounts, with regard to which the collection organs deploy all the faculties provided for in the legal system.

The amount outstanding at the end of each year is the result of adding to the amount outstanding at the start of that year the outstanding debts originated in the current year, called “annual debit," and subtracting any cancellations made in the year, either for revenue obtained as a consequence of collection activities or for other legally established causes.

The outstanding debt, as of December 31, 2019, was €42.77 billion, which represents an increase of 2.7 percent compared to December 31, 2018. The growth in outstanding debt is largely explained by the inflow of debts from other entities, related to debtors convicted of acts of terrorism (compensation to victims paid by the State). In 2019, there was an extraordinary charge for this concept of 1.3 billion (more than 15 times the equivalent charge of the previous year), which will largely end up being cancelled in the future due to the manifest impossibility of collection.

Table No. 37 New window represents the Evolution of the outstanding debt at the end of each of the years included in the period 2000-2019 (Annex).

In Table No. 38. Breakdown of outstanding debt New window (Annex) details the data relating to this concept.

Outstanding debts in the payment period

As regards executive debt, during 2019, the total amount of debt to be managed in the executive period amounted to 33,136.7 million euros. This amount includes the outstanding debt in enforcement at the beginning of 2018 and the charge or debts in enforcement charged during the year. The total amount of debts subject to enforcement surcharge in 2019 amounted to 9,805.9 million euros, 10 percent more than in 2018. Of this amount, debts arising from the application of taxes under the jurisdiction of the Tax Agency amounted to 5,695 million and those of other entities to 4,111 million euros. On the other hand, debt amounting to 9,225.4 million was cancelled.

The principal magnitudes relating to the collection phase are shown in the tables listed below in the Annex:

Table No. 39. Data relating to executive debts during 2019 New window

Chart No. 40. Evolution of the position in the executive period (2006-2019) New window

Debts arising from the application of the taxes which are under the Tax Agency's remit

Of the debt subject to the enforcement surcharge in 2019, 58 percent of the total, 5,694.8 million, comes from debts originated by the application of taxes under the jurisdiction of the Tax Agency. This debt comes both from settlements carried out by the Tax Agency and from self-assessments filed by the taxpayers without admission or with failed deferments. The debt arising from the application of taxes under the jurisdiction of the Tax Agency amounting to 6,438.8 million has been cancelled.

Furthermore, to prevent and combat asset stripping of debtors, cautionary measures have been developed in recent years (when there are indications that the debt payment could be unfulfilled or severely impeded), along with derivations of responsibility (as a mechanism to transfer the payment obligation from one taxpayer to another), under the circumstances established by Law.

In Table No. 41. Precautionary measures and derivations of liability New window (Annex) shows the results obtained in 2018 and 2019 and their rate of variation.

Management of debt of other entities

In 2019, collection was carried out during the executive period for a group of 173 external entities, including 45 Autonomous Organizations, 16 Autonomous Communities, 50 Local Entities and 46 Public Entities, in addition to the different Ministerial Departments that have incorporated public law resources to the enforcement procedure and other public law debts whose income must increase the State Budget. The Tax Agency has also managed collection of debts from other European Union Member States within the framework of Mutual Assistance, as well as from other countries based on international agreements undertaken (OECD).

In 2019, the amount of debt subject to enforcement surcharge amounted to 4,111.2 million euros. Debt amounting to 2,786.7 million euros has been cancelled.

By origin, the external entities with the highest amount of debt to be managed by the Tax Agency during 2019 have been the Ministerial Departments (34.6 percent), the Autonomous Communities (12 percent) and the Autonomous Traffic Headquarters Agency (8 percent).

As regards the Autonomous Communities, with the highest amount of debt managed in 2019, Andalusia and Catalonia stand out.

Other actions related to control during the collection phase

Within the framework of mutual assistance between member countries of the European Union, the Tax Agency has sent 1,614 requests to other member countries during 2019, compared to 906 sent in 2018.

These requirements include requests for collection, information, notification and adoption of precautionary measures.

Requests received from member countries of the European Union have also been addressed, reaching 1,859 requests in 2019, compared to 1,607 in 2018.